Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved.
IRISO ELECTRONICS CO., LTD.Stock Code: 6908
(Nov 2, 2017)
Consolidated Financial Results Briefing Materials
For 2nd Quarter Of FY 2017
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 1
1. Summary of Business Performance
Net sales and operating income set a record high• Net sales increased by 13.9% year-on-year, and quarterly sales exceeded 10 billion yen for the two
consecutive quarter. Accordingly, half-year sales have surpassed 20 billion yen for the first time. This was due to a steady growth in sales volume mainly in automotive segment in addition to the effect of yendepreciation.
• Operating income ratio was 19.0%, increasing by 3.3 percentage points year-on-year due to the sales increase, result of cost reduction efforts, and the effect of yen depreciation.
【By market】• Automotive segment: Driven by strong sales of products for safety applications including cameras and radars,
which are increasingly used in vehicles along with the development of ADAS, and also products for powertrain using the floating BtoB connector “Z-Move™”, which has a function to make movements in three directions.Sales in Car-Electronics segment rose to a record-high for the third consecutive quarter and surpassed the sales in AVN segment.
• Industrial segment: Increased for PLCs, servo amplifiers, and inverters owing to rising demand for FA equipment. Half-year sales exceeded one billion yen for the first time.
【By area】
• Japan: Increased in automotive and industrial markets.• USA: Favorable sales in automotive market mainly for safety applications.• China, Taiwan & South Korea: increased mainly in Car-Electronics segment and industrial markets.• EU: Increased due to strong sales mainly of safety related products in automotive market.
【Topics】
• IRISO renovated the Ibaraki Plant and strengthened production capacity for high quality products with our expanded clean room facilities.
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 2
Net sales
EPS
Net income
Ordinary income
Operating income
Average exchange rate
during the period
YoY change
18,159
1,913
2,638
81.81 yen
106.43 yen
2,845
USDEURO
13.9%2,528
1,08538.1%
1,22946.6%
94849.6%
126.63 yen
2QFY 2016
20,687
2,862
3,867
3,930
2QFY 2017
4.99 yen7.51 yen119.12 yen
120.91 yen
2. Consolidated Results for 2Q of FY 2017 (YoY Change)
Unit: Millions of yen
111.42 yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 3
3. Breakdown of Net Sales (by Market)
Industrial(Industrial equipment, etc.)
Total
Consumer(OA, game consoles, Digital cameras, cellular telephones, televisions, etc.)
Note: AVN is an abbreviation of Audio Visual Navigator, and refers to general car audio equipment, navigation systems, etc.
Automotive(car-mounted products)
Sales ratio
Electronics(Other electric componentsincluding ADAS , Powertrain and switches.)
AVN
(Car audio, visual, navigation systems, etc.)
Factors for increase/decrease
YoYchange
2QFY 2017
5.3%45.8%1,087
83.8%14.3%17,337
10.9%0.7%2,263
43.0%24.5%8,895
40.8%5.2%8,442
100.0%13.9%20,687
Cat
egor
y
• Increased in sales for PLCs, servo amplifiers, inverters, etc. Sales exceeded 1 billion yen for the first time.
• Increased in sales for OA equipment including printers and MFPs.
• Along with the advancement of ADAS and car electrification, the electronics segment has increased and exceeded the sales of AVN segment.
• Sales for ADAS related safety applications including car-mounted cameras and radars remained favorable and increased by 70% compared to the previous year.
• Overseas ratio was 78.4%.
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved.
3,946 4,269 4,170 4,295 4,147
3,5713,936 4,225 4,302 4,593
1,187985 906 1,085 1,178
368425 471
537 549
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Q2FY2016
Q3FY2016
Q4FY2016
Q1FY2017
Q2FY2017
Automobile (AVN) Automobile (Electronics) Consumer Industrial
9,073 9,615 ◆◆◆◆ YoY change9,772
Total ::::
8,597Total ::::
8,395Total ::::
8,205Total ::::
7,517
10,219
Total ::::
8,740
10,468
Industrial49.1%
Consumer(0.8)%
Automobile (Electronics)
28.6%
Automobile(AVN)5.1%
Automobile(Total)16.3%
4. Net Sales by Market (Quarterly Trends)
◆ ◆
・While sales increased for OA equipment, products for game consoles declined.
・Sales for safety related applications drove growth in car electronics segment, which rose to a record high. Powertrain related sales also increased・ Quarterly sales in car electronics segment exceeded that of AVN segment for three consecutive quarters.
・Increased for PLCs and servo amplifiers etc.
Unit: Millions of yen
4
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 5
1,957 2,133 2,076 2,226 2,232
2,648 2,845 2,454 2,723 2,809
1,448 1,434 1,871
1,7601,936
876 969 987 1,0131,0961,648
1,693 1,8451,904 1,800495
541 538592 594
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Q2FY2016
Q3FY2016
Q4FY2016
Q1FY2017
Q2FY2017
Japan China, Taiwan and South Korea Europe Singapore U.S.A Thailand
Thailand20.0%
U.S.A.9.3%
Singapore25.1%
Europe33.7%
China, Taiwan&South Korea
6.1%
Japan14.1%
5. Net Sales by Area (Quarterly Trends)
◆◆◆◆ YoY change◆
9,073 9,615 9,772 10,468◆
• Increased mainly in Car-Electronics segment.
• Increased in automotive and industrial markets.
• Sales for safety related apps trended favorably
• Sales in automotive market trended favorably.
• Sales for safety related applications trended favorably.
Unit: Millions of yen
10,219• Increased in automotive
and consumer markets
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 6
2,381 2,322 2,290 2,421 2,437
3,967 4,219 4,532 4,643 4,727
362 337 342 355 3631,874 2,152 2,126 2,296 2,365489585 482 505 575
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Q2FY2016
Q3FY2016
Q4FY2016
Q1FY2017
Q2FY2017
FPC B to B Pin Header Auto app IF Others
Others*17.8%
Automobileapplication IF
26.2%
Pin Header0.1%
BtoB connector19.2%
FPC connector2.4%
◆◆◆◆ YoY change
6. Net Sales by Product (Quarterly Trends)
◆ ◆
9,073 9,615 9,772 10,219 10,468
• Automotive segment trended favorably.
Unit: Millions of yen
• Automotive segment trended favorably.
BtoBFPC
Pin Header Auto app IF
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 7
7. Consolidated Statements of Income (Cumulative) (YoY Change)
(60.1)%(149)0.5%1001.4%250Non-operating expenses
9481,185
(43)1,229
(5)1,085
4861,571
9562,528
YoYchange
120.9181.81EPS
45.0%18.5%3,81714.5%2,631Pretax income
-(0.2)%(49)(0.0)%(6)Extraordinary income (loss)
38.1%19.0%3,93015.7%2,845Operating income
13.9%19.2%3,97219.2%3,486SG & A
24.8%38.2%7,90234.9%6,331Gross profit
8.1%61.8%12,78465.1%11,827Cost of sales
49.6%13.8%2,86210.5%1,913
111.42 Yen/
126.63 Yen106.43 Yen/
119.12 YenExchange rate(USD/EURO)
46.6%18.7%3,86714.5%2,638Ordinary income
(14.7)%0.2%370.2%43Non-operating income
13.9%100.0%20,687100.0%18,159Net sales
2Q FY 2017
2Q FY 2016
4.99 Yen/
7.51 Yen
Net income
-
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved.
8. Consolidated Balance Sheets (compared to the end of the previous year)
Retained earnings 2,159
2,15979.3%44,89681.6%42,737Shareholders' equity
1,34315.9% 9,01414.6% 7,670Total liabilities
Foreign currency translation adjustment 7057054.3%2,4203.3%1,715Valuation/translation
difference
310.5%2700.5%239Minority interests
Net assets per share1,998.71yen(previous period 1,877.72 yen)2,89584.1%47,58785.4%44,692Total net assets
251.2%6951.3%669Noncurrent liabilities
4,238
1,318
4,2381,858
2,380
Increase/Decrease
Notes payable and accounts payable649Provision for bonuses196Income taxes payable138
14.7%8,31913.4%7,000Current liabilities
100.0%56,602100.0%52,363Total liabilities and net assets
100.0%56,602100.0%52,363Total assets
Tangible fixed assets1,82139.6%22,39239.2%20,534Noncurrent
assets
Cash and deposits 582Notes and accounts
receivable-trade 1,09060.4%34,20960.8%31,828Current assets
Factors for increase/decrease
As ofSep 30, 2017
As of March 31, 2017
8
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved.
---Net increase (decrease) in short-term loans payable
(2,241)-2,241Proceeds from diposal of treasury stock
(721)(3,198)(2,477)Purchase of property, plant and equipment
(48)(50)(1)Purchase of intangible assets
427(723)(1,151)Decrease (increase) in notes and accounts receivable - trade
(882)3071,189Increase (decrease) in notes and accounts payable - trade
1,80015,82514,024Cash and cash equivalents at end of period
(391)582973Net increase (decrease) in cash and cash equivalents
(2,269)(743)1,525Cash flows from financing activities
(814)(3,275)(2,460)Cash flows from investing activities
1,6704,4362,766Cash flows from operating activities
Increase/Decrease
2QFY 2017
2Q FY 2016
9
9. Cash Flows
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 10
2,719
5,446
2,477
5,431
3,198
7,500
0
4,000
8,000
FY2015 FY2016 FY2017
Depreciation & Amortization
Research & Development
Capital Investment
Note: Each figure at the foot of bars shows the actual amount for the first quarter, and those at the top are for full year.
1,544
3,178
1,529
3,402
1,761
4,100
0
1,000
2,000
3,000
4,000
FY2015 FY2016 FY2017
10. Capital Investment, Depreciation & Amortization, and Research & Development
487
976
418
876
554
1,200
0
500
1,000
FY2015 FY2016 FY2017
(Forecast) (Forecast) (Forecast)
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 11
Net sales
Net income
Ordinary income
Operating income
Average exchange rate
during the period
Revised plan forFY 2017
37,547
4,875(13.0%)
6,750(18.0%)
109.03 yen
6,661(17.7%)
USDEURO
RMB
120.00 yen15.80 yen
Results ofFY 2016
40,000
5,200(13.3%)
7,200(18.0%)
7,200(18.0%)
110.00 yen
Initial plan forFY 2017
119.37 yen16.20 yen
EPS 207.16 yen 219.65 yen
*Considering the result of 1st half and foreign exchange rates, we revised our initial forecast.(Forecasted exchange rates for the 2nd half: 110.00yen/USD, 125.00yen/Euro, 16.80yen/RMB)
245.00 yen
41,500
7,900(19.0%)
7,800(18.8%)
5,800(14.0%)
110.76 yen125.88 yen
16.62 yen
11. Revised Plan for FY 2017
Unit: Millions of yen
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved.
The construction is on course for completion in December 2017
CityNantong, Jiangsu
Land area About 36,000m2
Buildingarea
About 26,000m2
(our largest plant)
Ship to China
Completion In Dec. 2017
Start of operation In Mar. 2018
Feature
Smart factorywith new
production system through
IoT
Full view from the northwestMain entrance
Corporate logo on exterior wall
Full view from the northeastCompleted roofing work
Assembly area under construction
12. Topics – New Plant in Nantong, China
12
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 13
Renovation of Ibaraki Plant• Purpose: Establishment of production system to ensure higher quality
to respond increasing demand for our connectors to be used for powertrain of vehicles
• Improvement: Expansion of clean room facilities in assembly process
13. Topics – Renovation of Ibaraki Plant
Copyright © 2017 IRISO Electronics Co., Ltd. All Rights Reserved. 14
Company Overview
Company name IRISO ELECTRONICS CO., LTD.
Business description Manufacture and sales of various types of connectors
Establishment December 1966
Number of employees 3,324 (as of September 30, 2017)
Capital 5,640 million yen (as of March 31, 2017)
Headquarters 2-13-8, Shinyokohama, Kohoku-ku, Yokoha ma, Kanagawa
OperationsDomestic
Overseas
Headquarters, Iwate, Ibaraki, Aichi, OsakaSingapore, Hong Kong, U.S.A., Germany, Thailand, So uth Korea, China (Shanghai, Dalian, Tianjin, Suzhou), Ma laysia, Taiwan, India
Research & development
Headquarters (IRISO Technology Park), Kawasaki(Production Technology Development Center),Shanghai R&D Center
Manufacturing plants Ibaraki, China (Shanghai), Phil ippines, Vietnam (Hai Duong)